Exhibit 10.9.1(c)

                               SECURITY AGREEMENT

AGREEMENT made as of August 28, 2001, by and between  FRESHSTART VENTURE CAPITAL
CORP.  with an address at 437 Madison  Avenue,  38th Floor,  New York,  New York
10022  (hereinafter  referred to as the "Secured Party") and SMARTPROS,  LTD., a
corporation  duly organized under the laws of the State of Delaware,  authorized
to do  business  in the State of New York as  SmartPros  of New  York,  having a
principal  place  of  business  at  12  Skyline  Drive,  Hawthorne,  N.Y.  10532
(hereinafter referred to as the "Debtor").

                              W I T N E S S E T H:

     WHEREAS,  the  Secured  Party  has  agreed  to lend the  Debtor  the sum of
$500,000.00 (the "Debt") to be repaid, pursuant to a Loan Agreement,  (the "Loan
Agreement") and a certain promissory note (the "Note") of even date herewith and
the Debtor has agreed to execute this  Security  Agreement  granting the Secured
Party a first and second  security  interest,  respectively,  in the  collateral
hereinafter described as a condition to Lender funding the said loan.

     NOW,  THEREFORE,  in consideration of the mutual promises  contained herein
and for other good and valuable consideration, it is hereby agreed as follows:

1. CREATION OF SECURITY INTEREST
--------------------------------

The Debtor hereby grants to the Security Party and the Secured Party hereby
accepts, a first and second security interest, respectively, in the collateral
described in Paragraph 2 herein to secure the payment of the Debt by Debtor in
accordance with the terms set forth in the Loan Agreement and the Note. The
Debtor hereby authorizes the Secured Party to file such financing statements or
amendments thereof as may be necessary in the form provided in Article 9 of the
Uniform Commercial Code to perfect the security interests herein created in the
collateral hereinafter described.

2. COLLATERAL
-------------

To secure the payment of an indebtedness in the amount of $500,000.00 with
interest thereon payable in accordance with the Note and Loan Agreement executed
on even date herewith, and also to secure any other indebtedness or liability of
the Debtor to the Secured Party, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, including all future
advances or loans which may be made at the option of the Secured Party (all
hereinafter called the "Obligations"), Debtor does hereby grant and convey to
the Secured Party, a security interest in (and mortgages to, if so necessary)
all of the following collateral ( as such term may be referred to in Article 9
of the New York Uniform Commercial Code), to wit: all of the Debtor's assets,
including, but not limited to patents, copyrights, trademarks, film library,
inventory, equipment and intangibles of any nature, now or hereafter owned or
acquired by Borrower and/or its subsidiaries whether now owned, or later
acquired, arising of every kind and nature including but in no way limited to,
all assets relating to the on-line/video professional education business
operated by the Borrower and all assets listed on Schedule "A" annexed hereto,
and all of the Debtor's assets, inventories (raw materials, work-in-progress,
finished goods and supplies), titled motor vehicles, leases, finished goods and
supplies, contract rights, accounts receivable, in excess of $750,000.00, and
all tangible and intangible assets now owned or later acquired and all proceeds
and products from all collateral covered by this security agreement whether or
not purchased with loan proceeds located at Debtor's address or elsewhere, and
any other real and/or personal property owned by the Debtor, together with all
substitutions, replacements, additions and accessions thereto (hereinafter
referred to as "Collateral"). Debtor hereby authorizes secured parties to
execute and record any UCC-1 financing statements in connection herewith against
Debtor and/or its subsidiaries.

In addition, Debtor has granted Lender a second position security interest in
all receivables of the Debtor and/or its subsidiaries, subordinate only to a
first position security interest not to exceed $750,000.00.

3. REPRESENTATIONS AND WARRANTIES OF DEBTOR
-------------------------------------------

Debtor  warrants and  represents  the  following:  (A) Debtor  agrees to pay and
perform all of the  obligations  secured by this  Agreement  according  to their
terms and defend the title to the collateral against all persons and against all
claims and all demands  whatsoever;  (B) On demand of the Secured Party,  Debtor
will execute any written  agreement or do any other acts necessary to effectuate
the  purposes  and  provisions  of this  Agreement,  execute any  instrument  or
statement  required  by law or  otherwise  in  order  to  perfect,  continue  or
terminate the security  interest of the Secured Party in the  collateral and pay
all costs or filing  fees in  connection  therewith;  (C)  Debtor  shall  retain
possession of the  collateral  during the existence of this agreement and Debtor
agrees not to sell,  exchange,  assign,  loan,  deliver,  mortgage or  otherwise
dispose of same without the prior written  consent of the Secured Party.  Debtor
further agrees to keep the collateral at the location specified in this Security
Agreement; (D) Debtor agrees to keep the collateral free and clear of all liens,
charges,

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encumbrances,   taxes  and  assessments,  and  to  pay,  when  due,  all  taxes,
assessments and licenses fees relating to the collateral.; (E) Debtor shall keep
the collateral insured against loss by fire (including extended coverage), theft
and other hazards as the Secured Party may require.  Debtor shall give immediate
written  notice to the  Secured  Party and to  insurers of loss or damage to the
collateral  and shall  promptly file proofs of loss with  insurers.  The risk of
loss,  damage or  deterioration  of or to said goods shall rest upon the Debtor,
and no such loss, damage or deterioration shall in any way diminish or discharge
the liability of the Debtor to pay the full total loan and any accrued  interest
thereon and the debtor agrees to give  immediate  notice to the Secured party of
any loss or damage to any of the said goods or loss of possession  thereof.  The
Lender is expressly  authorized  by Debtor to insure said goods  against loss or
damage;  (F) Debtor  agrees to use the  proceeds of the loan to pay the purchase
price of the  equipment,  filing fees and  insurance  premiums and  specifically
authorizes  Secured Party to disburse same directly from the loan proceeds.  The
Secured Party is  specifically  authorized  to pay the proceeds  directly to the
seller/vendor of the collateral.

4. GENERAL PROVISIONS
---------------------

(A) The waiver of or  acquiescence  in any default by the Debtor,  or failure of
the  Secured  Party to  insist  upon  strict  performance  by the  Debtor of any
warranties  or agreements in this  security  agreement,  shall not  constitute a
waiver of any  subsequent  or other  default or  failure;  (B) Notices to either
party shall be in writing and shall be delivered personally or by mail addressed
to the party at the address herein set forth or otherwise designated in writing;
(C) The Uniform Commercial Code shall govern the rights,  duties and remedies of
the parties and any provisions  herein declared  invalid under any law shall not
invalidate any other provision of this agreement.

5. EVENTS OF DEFAULT
--------------------

The  occurrence of an "Event of Default" as defined in the Loan Agreement or the
Note  shall be deemed a default  hereunder.  Each such  Event of  Default as set
forth in the  Loan  Agreement  and the Note is  deemed  incorporated  herein  by
reference as if fully set forth at length herein.  For reference  purposes,  the
following  may  constitute  a default of the Debtor:  (a) The failure to pay the
principal or any installment of principal or of interest on the  indebtedness on
any note or notes  when due;  or (b) The  failure  by  Debtor to comply  with or
perform any  provision of this  Agreement,  the Loan  Agreement,  if any, or any
other  agreement  between Debtor and Secured Party  executed in connection  with
this loan, or otherwise;  or (c) If any false or misleading  representations  or
warranties are made or given by Debtor in connection with this agreement; or (d)
If the collateral is subject to levy or execution or other judicial process, and
the same is not removed or bonded  within ten (10) days after any lien is placed
thereon; or (e) The commencement of any insolvency  proceeding by or against the
Debtor or of any guarantor or surety for the Debtor's obligations; or (f) In the
event of any  reduction in the value of the  collateral or any act of the Debtor
which imperils the prospect of full  performance or satisfaction of the Debtor's
obligations herein, at the sole discretion of Secured Party.

6. SECURED PARTIES REMEDIES UPON DEFAULT
----------------------------------------

(A) On the occurrence of any Event of Default, or at any time thereafter, at the
option of the Secured  Party,  the  Secured  Party may declare all or any of the
obligations  secured by this Agreement and the Loan Agreement shall  immediately
become due and payable in full  without  notice or demand and the Secured  Party
shall  have  all  the  rights,   remedies,   and  privileges   with  respect  to
repossession,  retention  and  sale of the  collateral  and  disposition  of the
proceeds as are accorded to the Secured Party by the applicable  sections of the
New York Uniform  Commercial Code respecting  "Default" in effect as of the date
of this Security  Agreement,  or as may be granted to Secured Party  pursuant to
any Note or Loan  Agreement or other document  executed in connection  with this
Loan. (B) Upon any default,  the Secured Party's reasonable  attorney's fees and
the legal and other  expenses for pursuing,  searching for,  receiving,  taking,
keeping, storing, advertising, and selling the collateral shall be chargeable to
the Debtor,  and shall become party of the principal  indebtedness  and shall be
deemed secured  hereunder and by the collateral until fully paid. (C) The Debtor
shall remain liable for any  deficiency  resulting from a sale of the collateral
and shall pay any such deficiency  forthwith on demand.  (D) If the Debtor shall
default in the  performance  of any of the  provisions of this  agreement on the
Debtor's  part to be  performed,  Secured  Party may perform  same for  Debtor's
account and any monies expended in so doing shall be chargeable with interest to
the Debtor and added to the indebtedness secured hereby. (E) In conjunction with
or in addition to any other rights granted to secured Party,  Secured Party,  at
its  discretion,  may (i) enter  upon  Debtor's  premises  peaceably  by Secured
Party's own means or with legal process and take  possession of the  collateral,
or render it unusable, or dispose of the collateral on the Debtor's premises and
the Debtor  agrees not to resist or interfere;  (ii) require  Debtor to assemble
the  collateral  and make it  available  to the  Secured  Party at a place to be
designated by the Secured Party,  reasonably  convenient to both parties (Debtor
agrees that the Secured  Party's  address set forth above is a place  reasonably
convenient for such assembling);  (iv) Secured Party will give Debtor reasonable
notice of the time and place of any public  sale  thereof,  or of the time after
which any private sale or any other intended  disposition thereof is to be made.
The  requirements  of  reasonable  notice  will be met if such notice is mailed,
postage  prepaid,  to the address of the Debtor shown above,  at least seven (7)
days  before the time of the sale or  disposition.  The Secured  Party,  and its
representatives  shall have all the rights and remedies of a secured party under
the Uniform Commercial Code and any

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other  applicable  law.  It is  agreed  that  a  sale  to a  dealer/vendor  is a
commercially  reasonable method of disposition (but shall not be deemed the only
commercially  reasonable  method of  disposition)  and that the  Secured  Party,
and/or its representative may purchase said goods, if repossessed at a public or
private sale. Expenses of retaking,  holding, preparing for sale, selling of the
like  shall  include  Secured  Party's  (or  its  representative's)   reasonable
attorney's  fees  and  legal  expenses.   Any  deficiency  remaining  after  the
repossession and sale of the goods by Secured Party shall be paid immediately by
the debtor to the Secured Party upon demand  together with interest  thereon and
reasonable  fees of an attorney  employed to collect  such  deficiency.  (F) The
Secured Party may assign this  agreement  and if assigned the assignee  shall be
entitled,  upon  notifying  the  Debtor,  to  performance  of  all  of  Debtor's
obligations and agreements hereunder. (G) No acts, delays,  omissions, or course
of delaying  between the Debtor and the Secured  Party shall be waiver of any of
the Secured Party' rights or remedies under terms of this Security Agreement. In
case of shares of stock given as  collateral  security,  the  Secured  Party may
transfer the shares of stock to its own name or the name of any designee, act in
the  capacity  of  and  with  full  authority  as  sole  officer,  director  and
shareholder,  and sell said  shares of stock at public or private  sale with the
Debtor's  understanding  that the  assets of the  corporation  shall be  applied
against the outstanding debt and expenses upon the said sale.

7. MISCELLANEOUS
----------------

All terms and provisions of this agreement shall be binding upon and shall inure
to the benefit of, and be enforceable by the parties  hereto,  their  respective
legal  representatives,  successors and assigns.  All communications and notices
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
sent by United States mail, postage prepaid, to the parties at the address first
above written, or at such other places or places as the party addressed may have
designated by written notice to the other.  No waiver shall be deemed to be made
by any party of any of his rights  hereunder unless the same shall be in writing
and signed by each party hereto. This promissory note and the obligations of the
undersigned  shall be governed and construed in accordance  with the laws of the
State of New York.  For  purposes  of any action or  proceeding  involving  this
promissory  note or any of the obligations of the  undersigned,  the undersigned
hereby irrevocably submits to the jurisdiction of the courts of the State of New
York and of the United States having  jurisdiction in the County of New York and
the State of New York,  and agrees not to raise and waives any  objection  to or
defense  based  upon the  jurisdiction  or venue of any such court or based upon
forum non conveniens.  The  undersigned  agrees not to bring any action or other
proceeding  with respect to this  promissory  note or with respect to any of its
obligations  hereunder in any other court unless such courts of the State of New
York and of the United States  determine that they do not have  jurisdiction  in
the matter.  The Debtor  hereby waives trial by jury in any action or proceeding
in connection with this  agreement;  The headings of the paragraphs and sections
of this Agreement are inserted for  convenience  only and shall not be deemed to
constitute a part  hereof.  In the event that any word,  sentence,  paragraph or
article of this  Agreement is found to be void or voidable,  the balance of this
Agreement shall nevertheless be legal and binding with the same force and effect
as  though  the void or  voidable  parts  were  deleted.  This  writing  and the
documents  executed in connection with the loan contain the entire  agreement of
the parties with respect to its subject matter and no modifications, alterations
or waiver of all of any part shall be valid  unless made by a writing and signed
by all the parties hereto.

8. NO REPRESENTATION
--------------------

Each of the parties hereto and represents that the other parties, their agents,
servants or employee have made no representation or statement whether oral or in
writing, relating to or concerning this Agreement other than specifically set
forth herein. Each of the parties hereto warrants and represents to the other
that it is authorized or empowered to enter into this Agreement and perform the
terms hereof, and that in entering this Agreement and performing the terms
hereof, it will not be in violation of any other agreement, written or oral.
This Agreement may be executed in two or more counterparts, each of which is an
original, but all of which together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement the day
and year first above written.

DEBTOR:
SmartPros, Ltd.


     /s/ Dr. William K. Grollman            /s/ Alan Ross
--------------------------------------  ----------------------------------------
By: Dr. William K. Grollman,            By: Alan Ross
    President                               Chief Financial Officer

Freshstart Venture Capital Corp.,
Secured Party

--------------------------------------
Authorized Agent


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<PAGE>


                                   SCHEDULE A
                         TO SECURITY AGREEMENT BETWEEN
              FRESHSTART VENTURE CAPITAL CORP. AND SMARTPROS, LTD.


1.   All assets now owned or hereafter acquired by the Borrower  including,  but
not  limited to,  patents,  copyrights,  trademarks,  film  library,  inventory,
equipment and  intangibles of any nature,  now or hereafter owned or acquired by
Borrower  and/or its  subsidiaries,  all accounts,  accounts  receivable,  other
receivables,  contract rights,  chattel paper, general intangibles,  instruments
and  documents,   deposit   accounts,   and  notes;  any  other  obligations  or
indebtedness  owed to Borrower from whatever  source  arising,  now or hereafter
existing,  all rights of Borrower to receive any  performance or any payments in
money or kind; all guaranties of the foregoing and security therefor; all of the
right,  title  and  interest  of  Borrower  in and with  respect  to the  goods,
services,  or other property that gave rise to or secure any of the foregoing or
which are described  thereto,  and all rights of Borrower as an unpaid seller of
goods and  services,  including,  but not  limited to, the rights to stoppage in
transit, replevin,  reclamation and resale; and all of the foregoing whether now
or hereafter acquired or arising in the future.

2.   All of the Borrower's now owned or hereafter  acquired or created  interest
in machinery, equipment in all its forms, furniture,  furnishings, and fixtures,
together with tools, boats and motor vehicles of every kind and description, all
parts therefor,  and all improvements,  accessions or appurtenances  thereto and
all proceeds thereof.

3.   Any and all now owned or hereafter acquired inventory,  goods, merchandise,
or other personal property, raw materials, parts, supplies, work-in-progress and
finished   products,   intended  for  sale,   or  intended   for   inclusion  in
work-in-progress,  of every kind and description,  in the custody or possession,
actual or constructive, of Borrower, including insurance proceeds from insurance
on any of the above,  all of  Borrower's  interest  in  inventory  described  in
invoices,  any returns upon any accounts and other proceeds,  resulting from the
sale or disposition of any of the foregoing,  including, without limitation, raw
materials, work-in-progress and finished goods.

4.   All general  intangibles,  choses in action,  and causes of action, and all
other  intangible  personal  property  of  Borrower of every kind and nature now
owned or hereafter acquired by Borrower, including, without limitation, business
records, inventions, designs, blueprints, plans, specifications, patents, patent
applications,  trademarks,  trade names,  trade secrets,  goodwill,  copyrights,
registrations,  licenses,  franchises,  tax refund  claims,  insurance  proceeds
thereof,  including,  without  limitation,  insurance  covering the lives of key
employees  on which the Borrower is the  beneficiary,  and any letter of credit,
guarantee,  claim,  security  interest or other  security  held by or granted to
Borrower to secure payment by an account Borrower of accounts owed to Borrower.

     All of the foregoing is collectively the "Collateral".

<PAGE>


5.   All  products  of  Collateral   and  all  additions  and   accessions   to,
replacements of, insurance or condemnation  proceeds of, and documents  covering
Collateral,  all  property  received  wholly or partly in trade or exchange  for
Collateral,  all leases of Collateral and all rents,  revenues,  issues, profits
and proceeds arising from the sale, lease, license, encumbrance,  collection, or
any other  temporary or permanent  disposition of the Collateral or any interest
therein.

                                        SMARTPROS, LTD.

                                        /s/ Dr. William K. Grollman
                                        ----------------------------------
                                        Dr. William K. Grollman, President


STATE OF NEW YORK   )
COUNTY OF NEW YORK  )s.s.:

     On the 28th day of August in the year 2001, before me, the undersigned, a
Notary Public in and for said State, personally appeared Dr. William K.
Grollman, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s) or the person upon behalf of which the
individual(s) acted, executed the instrument.

                                        /s/ Kathleen F. Julian
                                        ----------------------------------
                                                  NOTARY PUBLIC


                               KATHLEEN F. JULIAN
                        Notary Public, State of New York
                                No. 02JU6001983
                           Qualified in Queens County
                        Commission Expires Feb. 2, 2002